ETF Silver holdings reach record 453 million ounces

Silver prices could rise sharply, possibly testing $19.00 or $20.00, before retreating toward $18.25 later in the week. Strong support for silver prices is positioned at $17.50 — $17.75.

The roll in the New York market is currently underway, which is expected to support silver prices. Much of the roll has been made already, however. The primary factor behind the rise in silver prices has been investment demand, as investors are concerned that the nascent economic recovery could evaporate, and the U.S. economy could drop back into a new recession.
This, plus speculative buying, has investors and others adding to already large long positions on expectations of even higher prices yet this week, and over the next few months. Many investors are concerned about currency markets and the potential for a sharp drop in equity markets.

As of 25 November combined ETF silver holdings reached a fresh record of 453.0 million ounces, up 1.9% from 444.8 million ounces in the previous week. Fabricators have been buying silver even at such high prices as they foresee demand for silver in some sectors such as electronics, batteries, and solar power panels pick up sharply in the first half of 2010.